Buy Max Healthcare; target of Rs 1200: Anand Rathi

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Max Healthcare's strong Q2FY27 performance, with revenue and EBITDA growth of 18% y/y, driven by a 13% y/y rise in other businesses (excluding oncology).
  • Brownfield expansion plans, including a Rs4.15bn capex approval for 209 beds across existing hospitals, and a Rs930mn capex for redevelopment at Max Super Speciality Hospital, Noida.
  • Growth prospects remain intact, led by ramping up of Max Smart and Max Vaishali, brownfield additions, and beds expansion plans.
  • The company's revenue and EBITDA are expected to clock 18% CAGR each over FY26-29e.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for: (a) successful execution of brownfield expansion plans, (b) growth in revenue and EBITDA, driven by increased occupancy and average revenue per patient, and (c) progress in the development of new hospitals, such as the proposed 525-bed hospital in Gurugram. Key risks include delay in project execution, adverse regulations, and lower international business.